All Forum Posts by: AJ Shepard

@Sofiya Cherni

I’m not familiar with the laws in your state. In oregon they are quite strict. Typically you would give them a non compliance notice with time to cure. After they have not cured the non compliance you can send a termination notice for cause. The lease terminates after the termination notice and you can proceed with the process of eviction.

Currently no cause termination notices have been banned by the cdc and most states have backed this up with their own version. If you go down this route you’re probably hoping they get scared and move out, but currently may not be held up in court, let alone heard.

My suggestion is that you serve them with the non-compliance with the lease and anything else they are breaking and hope they don’t cure it. For unauthorized occupants in oregon it’s a 7 day cure I think, something you can look up in the statutes. Typically service requires you add 2-3 days on to the notice for 1st class mail. You don’t need to pay a processor.

If none of this works, the other option, even though hard to stomach sometimes is cash for keys. Offer them

500 bucks to be out by the 1st and be done with it. In my experience it is way easier and cheaper to have them leave on their own accord. Even though you may be right and they may be awful, a little money can go a long way.

@Dan Heuschele concept on having 25% equity and having 100% equity is spot on.

As far as in practice, as you obtain more rental properties and have income coming in from those rental properties a mortgage lender will look at that income and it will be added to your regular income. This is what qualifies you to buy more than just one. This is the difference between buying an income property vs buying a second home. Much easier to qualify for income properties. Definitely consult a mortgage professional in the area you want to buy.

Our market it is a lot harder to find SFH that cash flow very well. If you are entering a market like Houston I would assume the same thing. Might be worth it to look at duplexes and 4 plexes to see if they cash flow better than a SFH does.

As far as the equity in your current home, obtaining a refinance now while interest rates are low is probably prudent. After you've done that, since it's your primary, finding a HELOC (Home equity line of credit) that goes up to 90% would be helpful as well. The ones we've always got have asked what we intend to use the money for and the best answer I have found is to improve the house of course. HELOCs can take a bit of effort to get, but you can never get one if you need it, so better to get one when you don't so you have it in the future.

Congratulations on your first duplex purchase! In Oregon, we use a specific lease, and you should be able to change the terms with an appropriate notice on a month to month contract. If you feel that you need to raise the rent you can do so with appropriate notice as well. Typically states are 30-day notice, please look up your own statutes or consult a property manager from your state. Additionally, most states have an association that helps landlords, generally, you have to sign up with them but way easier than paying an attorney every time you have a problem. In Oregon, we have the Rental Housing Alliance (RHA) that has forms as well as people that are knowledgeable that can answer questions. You're in control, it's about what you want to do and want to accomplish!

Welcome to BP! I think investing some in REITs is a good place to keep your money while you look for syndication (probably not ones with a lot of retail commerical right now....). When it comes to passive income investments, syndication is a great deal since cash flow is fairly predictable. When it comes to vetting a sponsor, it is always best to know if they have a solid reputation, a strong track record, and the right debt and equity relationships, and all other skills needed to manage the project successfully. Brian Burkes book the handsoff investor is a great read on how to vet deals and syndcators, so suggest picking that up ASAP.

@Abraham Arechiga

Flips are very retail oriented. I think you’ll find you like multifamily. Not everything needs to be perfect, it can be very good and still be a great product for a renter.

Refinancing instead of selling is a great way to get your feet wet to start. You’ll find that you really appreciate the depreciation that comes with owning real estate.

Using quality materials that last instead of just for looks can be good decisions to make. Such as putting a new tub in, instead of using plastic for surround put in tile.

If you know you’re going to keep the next project, ie enough funds, buy something meant for multiple units. A duplex or 4plex you can fix up.

Sounds like you’ve got a great start.

@David Burton

Books and podcasts:

Joe fairless apartment syndication (book and podcast)

Brian Burke - how to be a passive investor

Michael blank - podcast

Whitney Sewell - podcast

@Denny Le

I’m happy to chat with you! Looks like you are across the river from me as well.

Have you started compiling a list of investors? Do you have a deal already in mind?

@Chris John

Finding deals is hard work. What Trent didn’t say in this post is how many other deals he looked at to find this one. You’re probably not doing anything wrong and not all of them turn out as good as this one. But if you hit enough singles and doubles, sooner or later you’re gonna hit a home run. Stick with it and keep honing your skills, it will only get better!

@Nathan Olds

These guys are saying all the right things!!

You do it yourself and you’re actively working and gonna make more money (assuming you buy right and manage right, risk). I always suggest that if you are early on in your career in real estate that this is the way to go. You learn a lot and understand what the job is about. But it sounds like you have a duplex and may already have an idea.

Syndications, I heard this term the other day, are more coupon clippers. Send a check to cash (these days it’s all ACH) but usually super easy.

Just gotta figure out what is right for you. Each strategy can work, just depends on what you want.

@Sean Ohare

Maybe @Kurt Plaster can shed some light on how appraisers come up with adjustments for properties?

It is my experience that it depends on the area and the amount of work required to make the update....